Why Does Inventory Management Matter On Amazon
You can be doing all of the right things on Amazon to get people to your listings, but if you arent in stock, youll lose 100% of your potential sales.
Effective inventory management is more important than ever, especially if youre an Amazon seller. In the past year, Amazon has introduced monthly long term storage fees for slow-moving inventory, increased FBA fees, and launched the new Inventory Performance Index metric.
There have also been improvements to the basic inventory management features available in Seller Central. What these changes have in common is a mission to help Amazon merchants manage their inventory more effectively.
Are you struggling with managing your inventory properly? Do you keep running out early or having trouble fulfilling orders properly? . Here are the that can help
First off, what is the Buy Box?
The Buy Box is a section on the right side of an Amazon product detail page where customers can add a product to their cart or make an instant purchase. Amazon generates over $150 billion in sales every year. Of those conversions, over 90% occur using Amazons Buy Box.
If you sell on Amazon and want to increase sales online, winning the Buy Box is pivotal. Retailers featured on Amazons Buy Box for product pages sell more products.
- Promotional messages such as Sale
- Suggestive commentary such as Best Seller
Sell Your Amazon Products In Bundles
You may have noticed that customers may like to buy complementary items to one of your orders. The problem is that Amazon applies referral and shipping fees for each order, which ends up costing you money.
Instead, you can bundle multiple products in one, so Amazon only charges you once for one customer purchase. You may have to pay slightly more in referral and shipping fees due to the size, but it may be less expensive than the combined fees from separate orders.
On top of that, product bundles ensure that customers get the most out of their orders and your brand. A bundle can improve the customer experience by simplifying their purchase decision.
Get A Professional Seller Account
If youre serious about selling on Amazon, its better to sign up for the Professional Seller account at $39.99 per month than the free Individual membership. Since it comes with unlimited listings and extra features to help you sell more on the platform, it will save you more money in the long term.
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Which Account Is Best For You
If youre an established ecommerce seller moving to Amazon, the Professional Seller account is your best pick the Individual Seller account is very limited in comparison and requires more hands-on management.
However, if youre just starting to , you can get started on Amazon with no up-front costs at all using an Individual Seller account. It costs $0 to register an Individual Seller account and list products, and youre only charged fees when your products sell. In fact, youre not even chargedAmazon takes its cut from your payout, so you dont pay a dime out of pocket.
Sell Items With High Margin And Low Weight
Selling items with a high margin seems like a no-brainer, but most people dont realize that storage fees are determined by weight and size and not the price of the item.
Therefore, if you have a $10 item that weighs five pounds and a $100 item that weighs five pounds, it makes more sense to list the $100 item provided it has a better margin and actually sells.
For low-value items under the $10-$15 range, youre often just better off selling them on your own. This doesnt mean you cant sell them on Amazon , but the margins might not be worth it for new businesses, particularly if those items are also heavy or large.
New sellers often fail to consider the size and weight of their products in the FBA program. This is one area where your fees can really add up. Be sure to consider both factors and your margins before committing to selling these products through Amazon. In some instances, you will be better served by selling these items directly.
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Measure Success With Amazon Attribution
is a measurement solution that gives Amazon sellers access to sales impact analyses across media channels off Amazon including search, display, social, video channels and email.
Amazon Attribution allows advertisers and brands to uncover the insights needed to optimize their media campaigns and grow product sales.
How to Sign Up for Amazon Attribution
To gain access to Amazon Attribution, you must work directly with an that has access to the beta program. You must also fit the following requirements:
- A US Amazon vendor with active vendor code or a US Amazon seller brand owner UK and EU expansion is coming soon!
- Advertising in channels outside of Amazon
Amazon Attribution allows reporting of both orders and revenue for traffic originating off of Amazon. It can measure traffic brought directly to Amazon, as well as traffic to a site, which later converts on Amazon.
Amazon Attribution can measure traffic from nearly any source . Through the creation of orders and line items, brands can create unique tracking templates, and performance can be measured to any desired level of granularity.
Fulfillment By Amazon Fees:
Both individual and premium sellers can use fulfillment by Amazon of FBA to stock, pack and ship their products. Of course, Amazon charges a fee for that, and it is called FBA fees.
These fees cover two services-
- Pick, Pack & Weight Handling Fees: This is your entire pack-through-shipment fee, including your shipping cost.
- Monthly Storage Fees: This is the cost of storing your products in Amazons warehouse.
FBA fees vary depending on the size and weight of the product.
How Much Commission Does Amazon Take will base on the size of your product
Amazon divides FBA products into two size categories-
Standard-size products: Standard-sized items, fully packaged, must weigh less than 20 pounds and not exceed 18x 14x 8.
Oversize products: Any item over 20 pounds and exceeding 18x 14x 8 is considered oversized.
Now you have learned How Much Commission Does Amazon Take after you sold an item
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Sell Items In Bundles
When possible, its always advisable to sell your items in bundles instead of individually.
If you sell five individual items, thats five fulfillment fees youll pay to Amazon.
If you sell five items in one bundle, you now only pay one fulfillment fee.
Obviously, this can turn into significant savings over time. Youll have to bundle the items for the warehouse yourself, but the savings are worth the extra effort.
If you have items that can be bundled, consider selling them in packages.
Cost Of Inbound Shipping For Fba
Inbound shipping is the cost that you will pay to get your items to FBA warehouses. You are responsible for this cost.
The good news is that you will get Amazons partnered UPS rates when shipping to FBA warehouses. Most sellers pay around $1 per pound when first getting started.
Once you start to do larger shipments , you will likely see your costs drop below $0.50 per pound.
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How To Apply For The Amazon Brand Registry
To be a member of the Amazon Brand Registry you must:
- Step 1. Review eligibility requirements. Brands must have a registered and active text or image-based trademark.
- Step 2. Sign into Amazon Brand Registry. Brand Registry application must be submitted by the trademark owner. If you are an authorized agent, please have the trademark owner enroll the brand first, and add your account as an additional user. If you meet the eligibility requirements, sign in using your existing Seller or Vendor Central credentials. Or, if you dont yet have an Amazon account, create one for free.
- Step 3. Enroll your brand. Once you sign in, you will need to enroll your brand. After Amazon has verified the information you submit during enrollment, you will be able to access Brand Registrys features to help protect your brand.
More resources on the Amazon Brand Registry:
Export Duty That Is Charged When Amazon Ships An Item To An International Destination
A general rule is that, unless youre MCF, sellers dont pay extra FBA seller fees if they use FBA export to ship internationally.
Buyers pay for international shipping and costs related to export.
There are a couple of things you need to know about FBA export.
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How Much Does It Cost To Sell On Amazon
If you ever wanted to launch an Amazon business, nows the best time to do it: the world-renowned eCommerce platform has reached an annual revenue of $386 billion in 2020, with its growth expected to continue rising over the following years.
One thing that confuses many first-time entrepreneurs on Amazonand continues to confuse seasoned sellersis the long list of selling costs. Fees also vary based on your product and the program you chose .
To start a successful business on Amazon, you need to get a clear understanding of what the selling costs are and what you can do to save the most money. If not, you might get bad surprises and throw away your budget without realizing it.
Charge That Amazon Charges The Buyer When Returning A Product
- Includes Compensation for return shipping when a buyer receives the wrong item and requests a free replacement
This is a ledger item with the amount given to the buyer to compensate for shipping the item back.
Lets say a buyer wants to a return a TV because the wrong item was sent.
Amazon will add the shipping balance to the buyer. The buyer will then use the balance to purchase the return label.
Ultimately, it is a wash for the buyer as they are using the money that Amazon gave them.
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Amazon Seller Fees Guide Examples And Free Spreadsheet
What youll learn
- An explanation to every Amazon seller fee and charge
- Free spreadsheet going over all these fees that you can download or copy to your Google drive
- How to download your Amazon fees and charges to Google sheets
On this page, youll find the ultimate guide to ALL the 2022 Amazon seller fees youll encounter as a seller.
Visit our page to copy over to your Google account. No sign up required.
However, if you are a seller and want to understand the detailed breakdown of every fee and charge that Amazon makes you pay for their services to calculate your cost, profit, and loss, this is the place to be.
Lets not waste any time.
Which Fba Fees Are Included In The Amazon Fba Calculator
The is made up of two parts, the referral fee and variable closing fee . The referral fee is basically the charge for selling your item on Amazon. It is calculated as a percentage of the sale price or a minimum dollar amount, whichever is greater. The percentage of sale price varies by category and is typically 8-15%. The minimum dollar amount is almost always $1.00.
The referral fee is category-specific, and certain categories have higher or lower fees. The variable closing fee only applies to media products such as books, music, videos, DVDs, video games, consoles, and software. Amazon Individual seller fees are fees for sellers that plan on selling fewer than 40 items per month. They have a $0.99 per-item fee, as well as referral and variable closing fees.
In the calculator tool, the Fulfillment by Amazon fee is calculated based on the items weight and dimension. The fee includes two parts, a fulfillment fee and a monthly storage fee. The fulfillment fee covers the costs of labor for picking and packing, shipping, packaging supplies, shipping to the customer, and customer service. The monthly storage fee is calculated based on the volume of the product in cubic feet. There are other FBA fees that only apply in specific circumstances and are not included in the calculators results long-term storage fees, returns fees, and item removal order fees.
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Selling On Amazon Vs Selling To Amazon
Which program you choose to use to sell on Amazon depends on your store, fulfillment abilities, ROI goals, and many other variables.
Vendors who sell to Amazon avoid some headache with logistics, but are limited with their scope and ability to market products. Selling on Amazon is an option that is more suited to sellers who would sell to Amazon but want to take advantage of more exposure and other benefits of the Amazon Marketplace.
The biggest difference between Amazon sellers and vendors is whos actually selling the product.
- Sellers list, price, and market their products themselves.
- Vendors sell their products to Amazon-employed buyers, who then list and resell the products to Amazon users.
Heres a breakdown of other considerations when youre selecting between Vendor Central and Seller Central.
What Is Amazon Fulfillment By Merchant
Amazon Fulfilled by Merchant makes you responsible for picking, packing, and shipping the products you sell on the Amazon Marketplace. FBM does not give you the option to list products as Prime.
FBM Pros and Cons
While youll avoid some of the fees that come with FBA, youll be required to abide by all of Amazon seller rules . Not easy, but doable if you already have the right infrastructure in place to handle all of the above.
Unfortunately, With FBM you will not have access to selling via Amazon Prime , which in turn will lead to less sales than a comparable FBA offering.
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Decide Between The Professional Or Individual Seller Plan
When choosing an Amazon Selling Plan, consider the products you want to list. Both Individual and Professional Sellers can list products in more than 20 categories. Another 10 categories are available only to Professional Sellers who apply for permission and meet requirements. Here are the major differences between the Professional Amazon Seller plan vs. the Individual Seller Plan:
Individual Plan: Best if youre planning on seller fewer than 40 items per month. Theres no monthly subscription fee, but your selling fees are $0.99 per item in addition to referral fees and variable closing fees.
Professional Plan: Most established brands will start here that is, unless youre selling fewer than 40 items per month. The monthly subscription fee is $39.99 and there are also referral fees and variable closing fees .
Payment Statements Vs Amazon Seller App
The key takeaway about per-item fees is that you can always see your exact fees before you buy and sell an item.
Here’s an example of a book that I recently sold for $29.99. This is how it looked in my Transaction View Payment Report.
If you want to get to this same screen in Seller Central, go to Reports > Payments > Transaction View, look for a recent order, and then click on the number in the Total column.
As you can see in my example, this book sold for $29.99. Amazon then deducted the three applicable fees: Closing Fee , FBA Pick & Pack Fee, and Referral Fee.
They deducted a total of $11.20 in fees from my selling price. The remaining $18.79 was deposited into my account balance.
Now here’s how that same book looks in my Amazon Seller scanning app with a selling price of $29.99
It’s an exact match!
In other words, when I scanned this book last month, I knew exactly what my fees would be once the book actually sold and shipped to a customer.
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Enroll In The Amazon Brand Registry
What is the Amazon Brand Registry?
The gives brand owners access to proprietary text, image search, predictive automation, and reporting tools designed to protect their registered trademarks and create an accurate and trusted experience for customers.
The Amazon Brand Registry also allows brands to search for content using images, keywords, or a list of ASINs in bulk and report suspected violations through a simple, guided workflow.
Lets talk about why this is important for sellers.
While selling on Amazon, you may experience counterfeit issues or situations where your product content is changed by a third party seller.
The Amazon Brand Registry provides a necessary set of tools that may help sellers avoid these issues.
Heres how Amazons Brand Registry works, how to enroll, and other brand protection programs that you can use to prevent third-party sellers from counterfeiting your products on the marketplace.
Explore An International Amazon Strategy
In the beginning stages, most Amazon sellers will experience a combination of both excitement and fear when it comes to selling products internationally.
Common concerns like credit-card fraud and shipping delays may seem overwhelming at first, but with the right guidance, sellers can avoid common mistakes and simplify their global expansion process.
The decision to go global is often driven by a combination of many factors, some financial and others marketing, merchandising or operations related. It can be lucrative for some sellers, and not for others research carefully.
More resources on selling on Amazon internationally:
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Review Your Monthly Cost And Profit Breakdowns
Next, youll see a full breakdown of every monthly line item charged based on the order and product information you entered above. This breakdown may offer insight into where moving to an ecommerce platform and shipping through ShipBob can cut costs the most throughout the inventory storage and fulfillment process.